Can you say FEAR? The NAR’s latest ad campaign is motivated by fear of a changing market!
And it doesn’t stop there. Matt Carter of Inman News has word that Realtor.com (the NAR’s official website) honcho Allan Dalton is giving talks along these lines:
"The real estate industry is being attacked by non-real estate, cyberspace carpetbaggers who are working to become the first point of contact for buyers and sellers. It is more important than ever that we weave a bigger web on the web to attract more consumers to Realtors."
Their attack of Zillow and similar information gathering internet companies is just more fear!
The NAR wants to control all of the listing information so that the public is “forced” to use agents and brokers as a means of selling or buying property.
They are going to kick and scream all the way as information becomes increasingly more available to the public. As I have always maintained, public access to property information is not only inevitable but a necessary step towards a more efficient and ethical real estate industry. As soon as information is no longer held hostage, real estate agents will be forced to step up to the plate and deliver real, helpful skills and services in addition to listing information.
Many will leave this industry, which scary as it may sound is clearly due for a shakeout. (For instance, a Haitian warlord has reportedly recently been a licensed real estate agent in New York City! via GrowaBrain) Those who remain in the industry (I will and I am quite excited by these changes) will be able to provide a range of services for buyers and sellers that have less to do with providing information and much more to do with marketing, negotiating, and weaving through the plethora of bad information that is often part of any of these services. I frankly believe that for many, the amount of information placed before them will be so overwhelming that most will still choose to hire a professional to help them with their sale or purchase. Only time will tell.
This week’s carnival of real estate is up now. Next week, it’s right here at TrueGotham. Brace yourself.
The new National Association of Realtors advertising campaign (message: it’s a good time to buy and sell) screams of desperation, and it’s not convincing.
I happen to think the average home buyer out there sees the new NAR campaign for what it is… a feeble attempt at a “buy now” agent tactic that is precisely the fuel that infuriates most of the buying public that I talk to.
Now I agree with the NAR (you won’t see me say that often… in fact, it made we itch when I typed it!) that the public needs to be careful about getting too wrapped up in the negative buzz about the housing market. The market is off its highs and continues to cool in most parts of the country. Anyone who doesn’t know this needs to crawl out from under their rock. That said, in New York City, real estate continues to trade as people upsize, downsize, and generally “relocate” as their priorities continue to change.
Now the NAR doesn’t carry much weight here in the Big Apple, but I can’t imagine that this ad campaign has buyers across the rest of the country rushing out snatch up all that inventory. The NAR is simply spending some money to appease its constituents. Problem is, they are again shooting themselves in the foot, by further eroding what little credibility they have left.
Several months ago I posted a piece on TrueGotham asking whether or not co-op boards and their requirements could be contributing (not the sole cause of course) to a softening market.
The catalyst for the piece was a board rejection of a buyer who wanted to purchase my client’s property. The buyers were a sophisticated, financially qualified couple who were Russian immigrants. Absolutely lovely people. The contract price at the time was $1,080,000. The Board rejected these buyers and everyone was confused as to why.
It is imperative that I also state that in my 15 years in the industry, until this incident, I had only two previous board rejections. One of those came at the hands of this same building’s board about three-and-a-half years ago. At that time, everyone was equally puzzled. We heard through a reliable source that the Board was unhappy with the applicant’s age… can you say discrimination?
Wait, that’s not all! After the rejection of the buyers paying $1,080,000, we decided to lower the price of the property as the market had cooled a bit and began the process of procuring a buyer once again. We finally found another purchaser. Another perfect couple for the building (I know they were perfect because I have sold 20 or so apartments in this particular building and therefore have spent a lot of time there, and know a lot of people who live there), this time paying $975,000.
My seller had already lost $105,000. This 30-something couple were expectant parents, she in the medical field, and he an accomplished musician. They were not as financially qualified as the previous clients but they were mature, responsible individuals who were definitely not over-extending themselves and could easily afford the apartment and would be a positive addition to the building’s community.
Last Thursday, we received the call from the managing agent that the Board had rejected these applicants as well and would not entertain an interview. We were stunned for the second time. The managing agent then shared with us that the Board probably didn’t consider the wife’s income “because she is pregnant and won’t go back to work.” Can you say presumptuous?
Immediately upon receiving this news, the buyers prepared a letter from the wife as well as her employer stating not only her intention of immediately returning to work after her maternity leave, but that her projected income would likely be double her current income. Rejected again. Now this lovely couple with a one-week-old baby is scrambling to find a place to live. Fortunately they are working with a stellar broker who I know well and will do her very best to make this terrible situation as painless as possible. They will move on. My seller however, is still stuck with this empty apartment and after two board rejections and a significant financial loss he has filed a lawsuit against the board and the building.
What truly amazes me here is that the board doesn’t see how it is doing an absolute disservice to the building and its shareholders by hyper-scrutinizing applicants. By the way, this is not a Park Avenue or Fifth Avenue building either (for those who assume that those areas have the more “difficult” boards). Often times, they may have more stringent requirements but they also have more sophisticated Board members making decisions about prospective purchasers.
Now I could speculate as to what is going on in the building but truth be told, I have NO IDEA. Of seven members on the board, three seem to carry most of the weight in the decision-making process when it comes to applicants. I would be curious to see if any of these three would pass their own requirements, whatever they may be.
It’s all very puzzling and is a very unfortunate aspect of the co-op market. I do know however that the board has rejected five applications in the past six months. Of the few that were actually approved, two were purchasers for apartments owned by board members. I guess that makes sense since they know their own requirements better than anyone, but the guessing game that I and many of my colleagues are playing in trying to determine what they are seeking, is directly affecting the value of apartments in the building. Just last week I was having a conversation with a top agent (top 10 in the country!) who shared with me that she advises all of her clients to stay away from the building because “the board is insane and unpredictable.” Indeed a VIRAL reputation to have that is going to harm only those who are shareholders in the building.
This is a database of REBNY member exclusives. Although it will provide a more efficient means for the public to browse listings, it still doesn’t solve the lack of "complete" cooperation needed by the ENTIRE brokerage community to make all available property available to the public. Not ALL licensed brokers are members of REBNY. We still won’t have a "complete" database of available property listings.
But this is a hell of a start!
Hot off the presses:
REBNY to Develop Groundbreaking Home Listing Web Portal
Comprehensive Listing of NYC Homes to be Made Available to Public for First Time
NEW YORK, Nov. 1, 2006 – The process of buying a home in New York will take a giant leap forward early next year when the Real Estate Board of New York (REBNY) launches an historic new service that will provide the first comprehensive Web-based, user-friendly searchable database of residential properties in New York City.
REBNY has begun development of a Web portal that will incorporate its members’ listings and make the as yet unnamed service available to the general public free of charge. The organization’s size, scope and nature enable it to bring the collective knowledge and expertise of its more than 300 member brokerages together to create a site that will make home buying easier and save time for buyers, sellers and brokers alike. The site also will provide access to rental properties.
“Those looking for a home in New York city will soon have one tool that enables them to search and browse listings in the most comprehensive database of residential properties on the market,” said REBNY President Steven Spinola. “Accurate and current exclusive listings of the most active and professional firms in the city will be available.”
Currently, member brokers share their residential listings through the REBNY Listing Service (RLS). The RLS increases accessibility to the residential marketplace by providing REBNY brokers – representing buyers, sellers and renters – access to exclusive listings within three days of receiving them and helps maximize exposure for properties.
“The technology for the system already is in operation through REBNY’s RLS,” said Spinola. “Creating an easy-to-use interface for the typically more than 10,000 listings will put the comprehensive data at the public’s fingertips.” The service will provide New York homebuyers with a useful tool that arms consumers with a wealth of valuable information about prices for comparable homes. Visitors to the portal will be able to specify the characteristics of their ideal home, such as number of bedrooms and bathrooms, location, price and other amenities. The portal would then generate a list of homes meeting the specified criteria and supply broker contacts for each.
Development of the portal has been approved by REBNY’s Residential Board of Directors. REBNY residential member firms include, Bellmarc Realty, Brown Harris Stevens, Citi-Habitats, the Corcoran Group, Halstead Property, Prudential Douglas Elliman, Stribling & Associates, Warburg Realty Partnership, and 309 additional firms.
“This is a true first for New York’s residential real estate market,” said Frederick Peters of Warburg Realty Partnership, who is co-chair of REBNY’s Residential Board of Directors. “Not only is this great news for consumers, but it will enable brokers to provide a higher level of service to their selling customers and serve their buying customers in a more efficient and convenient manner.”
REBNY expects to have the portal ready for release to the public by the early 2007 home buying season.
Jennifer Breu, of the Heddings Property Group, has got an itchy trigger-finger. Some recent shots from around the city:
The president of Zillow, Lloyd Frink, has blogged a little about the recent complaint filed by the National Community Reinvestment Coalition (NCRC):
We try really hard to be approachable and open about what we’re doing, and take all feedback seriously. So we were surprised (and disappointed) that the group that sent the letter, the National Community Reinvestment Coalition, did not contact us first, and instead sent it directly to the press at the same time it was sent to the FTC.
Zillow is about empowering consumers with information and tools which they have not had access to before. Our Zestimates are designed as a starting point. We say in many places on the site (and next to the Zestimate on every home details page) that Zillow is not an appraisal, but a free research tool for consumers. We’ve also tried to be really transparent since we launched about Zestimate accuracy. We state that nationwide, our median margin of error is 7.2 percent, and 62 percent of Zestimates fall within 10% of the actual sale price of a home. (see accuracy statistics for every county Zillow covers here, or linked off the home page).
We pull these stats by looking at millions of transactions and Zestimates — that’s millions of comparisons — not by picking a handful of examples and drawing broad conclusions that make us look good.
We feel these accuracy numbers are pretty good, but we are working hard to make them better.
As a real estate professional, I see Zillow making every effort to improve their product by truly listening to feedback of both consumers and the real estate industry. I have watched as they shifted from claiming that Zillow was everything a homeowner needed to their newest pitch as a tool to get the homeowner started (much more accurate portrayal of their service thus far).
I do think Zillow has its place in the real estate market as a tool for both consumers and agents to assist in determining an accurate and fair asking price for a home prior to marketing. That said, the biggest improvement that Zillow needs to make is going to be the most challenging… they need to provide more timely and accurate data. I fully support their mission to make real estate market data public, but hope that they can find a more efficient means of ensuring that their data is up to date and accurate.
By the way, I love the new tool allowing the consumer or agent to make adjustments to the Zestimate. Just additional evidence that Zillow is striving to create a better product for their clientele.
And in the big picture, Zillow and companies like it are on the side of the free flow of information. In the long run, that’s very unlikely to hurt consumers.
Some advice for the NCRC… leave Zillow alone and do some snooping at the NAR. Now that’s an organization begging from some oversight.
Vivian S. Toy wrote an interesting article about developers living in their own buildings, which can change almost everything about the buildings:
"When you start out, it’s not a conscious thing, but your tastes and preferences are going to come out," he said. "When you’re choosing a lounge chair for the lobby, for example, you’ll pick one that you’d want in your house."
He plans to move into a three-bedroom apartment at the Element with his wife and two sons and admitted that "maybe I am making some conscious and subconscious changes because I’m sort of protecting where I’m going to be living as well."
There were two features that he added to the building because he knew he would appreciate them. One was a guest bathroom in the lobby and another was an elevator button that the concierge could push as soon as a resident entered the building, to shorten the wait for an elevator.
Developers also often tailor projects to suit their current lives. Mr. Liberman said that when he and Mr. Chamberlin first started building apartments, they were single and built only studios and one-bedrooms. They started building larger apartments when they both married and started families. "We’ve built to our own demography," Mr. Liberman said. "It’s hard not to project yourself into what you do."
You hear discussion of these kinds of arrangements fairly often. Typically some developer has taken over this or that penthouses, in some cases at cut rates, before the building is publicly available. Makes people a little jealous, I guess, at times, which is probably why it comes up so much.
Personally? Iwould perceive the developer taking an apartment in his/her project as a positive, and I’m not too concerned how much they pay. The obvious benefit to having the developer take up residence in the building is the additional commitment they will have to maintain and improve the building over time. There is no better sign of someone’s commitment than seeing that developer “walk the talk.” As a real estate agent and a property owner myself, I would be much more inclined to buy in a project where I new the Penthouse was occupied by the person putting their reputation on the line by constructing the project in the first place.
The Real Estate Journal wonders if it’s a mistake to try to sell your property during the holidays.
My experience is that property in Manhattan sells all 12 months of the year. The past eight years, there has been little slowdown over the holidays. Last year, the week between Christmas and the New Year was one of the busiest we have seen in my 15 years in the business.
Manhattan is an incredibly transient city with “movers” and shakers buying and selling all of the time. Certainly, family apartments move more quickly in the early spring as parents hope to make the transition for the children while they are on summer vacation. But aside from that, others are buying at all times of the year. Let’s also not forget that December tends to be the beginning of the “bonus shopping season” for Wall Streeters. That’s typically when they find out how much they will be getting in early 2007, and it can be a great time to have a nice apartment on the market.
It is also important to mention that many of my clients who have decided to buck the system by putting property on the market in August or December see less competition on the market. And while there are fewer buyers looking at these times, with fewer properties to choose from, sellers almost always attain sales prices similar to those attainable in a “busier” time of year.
